Fair Trading

We observe recent trends in increasing awareness in the fields of financial decision making and social consequences of peoples’ behavior in general. Therefore we investigate if people also value social responsibility (SR) in making financial decisions. We do this by using the pension universe as all working Dutch are obliged to participate in a pension fund. This is an interesting setting because there exists a discrepancy between the incentives of pension fund managers and the values of the majority of the pension participants. We show that people value SR in their pension investments. Dutch (European) pension participants have preferences to exclude companies that violate human rights and companies that operate in the weapons industry while these industries are both not in the list of “sin” industries in the US. Within the EU we show that women have different values toward SR than men. Furthermore we find that especially women, higher educated and higher income participants have a higher willingness to give up part of their pension income for SR pension products.